With recent technological advances in the financial industry, banks in the United States (and the rest of the world) continue to search for tools to optimize traditionally manual processes. With administrative costs that comprise such a large portion of a bank’s annual expenses, banking software systems that provide effective automation will continue to experience solid growth for decades to come. A major trend among banks is the automation of loan files. As any banker knows, a single file can represent mountains of paperwork and possibly years of work. This article looks at the ways banks are using bank imaging technology to streamline loan and credit file management.

Questions for consideration

Before considering your options for loan file automation, it is wise to first review some basic questions about the current situation of your bank. By thinking critically about your bank’s workflow as it is today, your financial institution can maximize your return on investment. The following questions can be helpful as you begin the optimization process.

• How efficient / effective is your current paper loan filing system?
• How much money does your financial institution spend each year creating and organizing physical files?
• How often should physical files be transferred from one branch to another?
• Things to consider: courier costs – routing for credit analysis, approval officer review, etc.
• Has your bank lost, corrupted, or completely misplaced a loan file, creating mountains of duplicate paperwork to restore the original files?
• Have clients or loan officers ever complained about the time it takes to approve or update loan files at your bank?

Loan approval process: a good place to start

Once you’ve identified the need to automate your loan process, a good place to start is at the very beginning of the application process. By implementing a banking software system that can manage your loan files from start to finish, your organization will get the highest return on investment from such a platform. When evaluating the offerings of different banking software companies, it is a good idea to find a system that integrates with your existing applications, subscription software, credit analysis platform, and documentation. It’s also important to find a system that provides up-to-date information on loan status, electronic routing, and multi-party document viewing rights. Through automatic updates of assigned user, loan status, and approval status, your bank will experience previously unrealized economies of scale.

Optimizing your bank’s loan portfolio

With the volume of loans processed each day at a single bank branch, keeping up with the status of each paper loan file has historically been a challenge for institutions of all sizes. When implementing bank loan software to centralize such activity, it is critical that your bank selects a bank software company that offers a loan portfolio management and reporting tool. These tools typically offer a customizable dashboard for instant analysis of a bank’s existing loan portfolio. Additionally, such platforms must provide a wide variety of reporting options, allowing users to subscribe to email alerts for specific activity in the pipeline. Additionally, reports should have the ability to be easily exported to standard formats such as .pdf and .csv, allowing for deeper analysis by management.

Customize loan files for your banking workflow needs

Perhaps the greatest benefit of automating loan files through bank management software is the ability to quickly glance through the entire documentation workflow and instantly understand which documents are missing. As documents are sent from one user to another through their banking workflow, users can be automatically notified by email that their action is required. When choosing a bank document management system to streamline your loan filing, it is vital that you choose a provider that allows you to configure unlimited workflow actions in their system. By customizing each workflow action to your bank’s needs, you can ensure that your system reflects your institution’s operational goals. Such items to consider in automating your workflow include: managing exceptions, defining user groups, email notification recipients, setting loan limits, and more.

Final Thoughts: Digitizing Loan Files

By automating the approval and life cycle of a loan file, your bank can reap significant benefits. Studies have shown that many financial institutions can recoup their investment in loan portfolio management software within twelve to eighteen years. By digitally capturing every action associated with a loan file, banks have been known to save money in the areas of administrative costs, overnight courier / delivery charges, storage space, and overall productivity.